The (final) amendment to FAS 133 (FAS 149) was issued on April 30. The new guidance mostly concerns embedded derivatives, and is designed to “improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly,” according to the FASB Staff.

• FAS 149 clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in Statement 133.

• FAS 149 also clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows.

The new guidance is effective (prospectively) for contracts entered into or modified after 6/30/03, and for hedging relationships designated after June 30, 2003.

Please visit the FASB site for posting of new guidance resulting from FAS 149:

• Newly cleared No. C18, “Shortest Period Criterion for Applying the Regular-Way Security Trades Exception to When-Issued Securities or Other Securities That Do Not Exist” 
• Newly released No. A23, “Prepaid Interest Rate Swaps”  (Comments dueJune 5, 2003)
• Various other issues that reflect changes related to the issuance of  Statement 149

Also, note that in conjunction with FAS 149, Implementation Issues A20, C19, D2, and E21 have been withdrawn.